Veterans and Dependents Education: Miscellaneous

DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 21

RIN 2900-AH60

Veterans and Dependents Education: Miscellaneous

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This document amends the educational assistance regulations.

It removes ``sunsetted'' provisions that had been authorized by the

Vietnam Era GI Bill. Under the Vietnam Era GI Bill, no benefits can be

authorized for training that occurred after December 31, 1989, and no

educational loans can be authorized for training that occurred after

December 31, 1991. Consequently, the provisions concerning such

educational assistance are removed because they are no longer of any

effect. This document also amends the educational assistance

regulations by placing virtually all of the provisions relating solely

to benefits under the Survivors' and Dependents' Educational Assistance

program in one subpart, 38 CFR Part 21, Subpart C. Further, this

document removes regulations in 38 CFR Part 21, Subpart E concerning

civil rights matters since they are duplicative of provisions in 38 CFR

Parts 18, 18a, and 18b. In addition, this document removes 38 CFR Part

21, Subpart F-2 concerning special benefits for certain

[[Page 26108]]

former military officers since the deadline for applying for such

benefits has expired and no further benefits can be paid. The

educational assistance regulations are further amended by removing a

number of other provisions that no longer apply or otherwise have no

substantive effect and by making changes for purposes of clarification.

EFFECTIVE DATE: May 24, 1996.

FOR FURTHER INFORMATION CONTACT: June C. Schaeffer, Assistant Director

for Policy and Program Administration, Education Service, Veterans

Benefits Administration, 202-273-7187.

SUPPLEMENTARY INFORMATION: This document affects 38 CFR part 21,

subparts B, C, D, E, F, F-2, and K. It removes provisions that are

obsolete, duplicative, or without substantive effect; moves provisions

from one subpart to another; and makes changes for clarification. This

document makes no substantive changes. Accordingly, there is a basis

for dispensing with prior notice and comment and delayed effective date

provisions of 5 U.S.C. 552 and 553.

The Secretary of Veterans Affairs hereby certifies that this final

rule will not have a significant economic impact on a substantial

number of small entities as they are defined in the Regulatory

Flexibility Act, 5 U.S.C 601-612. This final rule makes no substantive

changes. Pursuant to 5 U.S.C. 605(b), this final rule, therefore, is

exempt from the initial and final regulatory flexibility analyses

requirements of sections 603 and 604.

The Catalog of Federal Domestic Assistance numbers for the programs

affected by these regulations are 64.117 and 64.124.

List of Subjects in 38 CFR Part 21

Administrative practice and procedure, Armed forces, Civil rights,

Claims, Colleges and universities, Conflict of interests, Defense

Department, Education, Employment, Grant programs-education, Grant

programs-veterans, Health care, Loan programs-education, Loan programs-

veterans, Manpower training programs, Reporting and recordkeeping

requirements, Schools, Travel and transportation expenses, Veterans,

Vocational education, Vocational rehabilitation.

Approved: May 13, 1996.

Jesse Brown,

Secretary of Veterans Affairs.

For the reasons set out in the preamble, 38 CFR part 21 is amended

as set forth below.

PART 21--VOCATIONAL REHABILITATION AND EDUCATION

Subpart B--Claims and Applications for Educational Assistance

1. The authority citation for subpart B is revised to read as

follows:

Authority: 38 U.S.C. 501(a), ch. 51, unless otherwise noted.

2. The heading for subpart B is revised to read as set forth above.

3. The undesignated center heading preceding Sec. 21.1020,

Secs. 21.1020 through 21.1022, Sec. 21.1025, the undesignated center

heading preceding Sec. 21.1040, and Secs. 21.1040 through 21.1045 are

removed.

Subpart C--Survivors' and Dependents' Educational Assistance under

38 U.S.C. Chapter 35

4. The authority citation for subpart C is revised to read as

follows:

Authority: 38 U.S.C. 501(a), 512, 3500-3566, unless otherwise

noted.

5. Sections 21.3001 and 21.3002 are added, to read as follows:

Sec. 21.3001 Delegation of authority.

Except as otherwise provided, authority is delegated to the Under

Secretary for Benefits and to supervisory or administrative personnel

within the jurisdiction of the Education Service, Veterans Benefits

Administration, designated by him or her to make findings and decisions

under 38 U.S.C. chapter 35 and the applicable regulations, precedents

and instructions, as to the program authorized by this subpart.

(Authority: 38 U.S.C. 512(a))

Sec. 21.3002 Administration of Survivors' and Dependents' Educational

Assistance Program.

Subpart D of this part applies to the Survivors' and Dependents'

Educational Assistance Program, unless the provisions of a section in

that subpart are explicitly limited to one or more of the other

educational assistance programs VA administers.

(Authority: 38 U.S.C. 501, 3501-3566)

6. In Sec. 21.3021, paragraphs (h), (i), (j), and (k) are added

prior to the cross references, to read as follows:

Sec. 21.3021 Definitions.

* * * * *

(h) Program of education. The term program of education means any

curriculum or any combination of unit courses or subjects pursued at an

educational institution which is generally accepted as necessary to

fulfill the requirements for the attainment of a predetermined and

identified educational, professional, or vocational objective.

(Authority: 38 U.S.C. 3501(a)(5))

(i) Educational objective. An educational objective is one that

leads to the awarding of a diploma, degree, or certificate which

reflects educational attainment.

(Authority: 38 U.S.C. 3501(a)(5))

(j) Professional or vocational objective. A professional or

vocational objective is one that leads to an occupation. It may include

educational objectives essential to prepare for the chosen occupation.

When a program consists of a series of courses not leading to an

educational objective, such courses must be directed toward attainment

of a designated professional or vocational objective.

(Authority: 38 U.S.C. 3501(a)(5))

(k) Additional definitions. The definitions in Sec. 21.4200 apply

to subpart C of this part.

(Authority: 38 U.S.C. 501, 3501)

* * * * *

7. Section 21.3025 is revised to read as follows:

Sec. 21.3025 Nonduplication; Federal programs.

Payment of subsistence allowance and special training allowance is

prohibited to an otherwise eligible person--

(a) Who is on active duty and is pursuing a course of education

which is being paid for by the Armed Forces (or by the Department of

Health and Human Services in the case of the Public Health Service); or

(b) For a unit course or courses which are being paid for under 5

U.S.C. chapter 41.

(Authority: 38 U.S.C. 3681(a))

Sec. 21.3032 [Amended]

8. In Sec. 21.3032, paragraph (a)(2) is amended by removing

``Sec. 21.4105'' and adding, in its place, ``Sec. 21.3104''.

9. In Sec. 21.3040, an authority citation is added following

paragraph (d), to read as follows:

Sec. 21.3040 Eligibility; child.

* * * * *

(d) * * *

(Authority: 38 U.S.C. 3512(a))

Sec. 21.3041 [Amended]

10. In Sec. 21.3041, paragraph (d)(9)(iii) is amended by removing

``eligibility'' and adding, in its place ``eligibility'' and by

removing ``Sec. 21.4135(z)'' and adding, in its place,

``Sec. 21.3135(g)''.

[[Page 26109]]

11. In Sec. 21.3042, paragraph (d) is removed; and paragraph (a) is

revised to read as follows:

Sec. 21.3042 Service with Armed Forces.

(a) No educational assistance under 38 U.S.C. chapter 35 may be

provided an otherwise eligible person during any period he or she is on

duty with the Armed Forces. See Sec. 21.3021 (e) and (f). This does not

apply to brief periods of active duty for training. See

Sec. 21.3135(f).

(Authority: 38 U.S.C. 3501(d))

* * * * *

Sec. 21.3044 [Amended]

12. In Sec. 21.3044, paragraph (c)(1) is amended by removing

``Sec. 21.4237(d)'' and adding, in its place, ``Sec. 21.3344(d)''.

Sec. 21.3045 [Amended]

13. In Sec. 21.3045, the introductory text of paragraph (b)(1) and

the introductory text of paragraph (b)(2) are amended by removing

``21.4235 of this part'' each time it appears and adding, in its place,

``21.3344''; and paragraph (b)(2)(i) is amended by removing

``21.4137(a)'' and adding, in its place, ``21.3131(a)''.

14. An undesignated center heading and Secs. 21.3100, 21.3102,

21.3103, 21.3104, and 21.3105 are added to read as follows:

Counseling

Sec. 21.3100 Counseling.

(a) Purpose of counseling. The purpose of counseling is to assist:

(1) In selecting an educational or training objective;

(Authority: 38 U.S.C. 3520)

(2) In developing a suitable program of education or training;

(Authority: 38 U.S.C. 3520)

(3) In selecting an educational institution or training

establishment appropriate for the attainment of the educational or

training objective;

(Authority: 38 U.S.C. 3561(a))

(4) In resolving any personal problems which are likely to

interfere with successful pursuit of a program;

(Authority: 38 U.S.C. 3561(a))

(5) In selecting an employment objective for the eligible person

that would be likely to provide the eligible person with satisfactory

employment opportunities in light of his or her circumstances.

(Authority: 38 U.S.C. 3520, 3561(a))

(b) Availability of counseling. Counseling assistance is available

for--

(1) Identifying and removing reasons for academic difficulties

which may result in interruption or discontinuance of training; or

(2) In considering changes in career plans, and making sound

decisions about the changes.

(Authority: 38 U.S.C. 3520, 3561(a))

(c) Provision of counseling. VA shall provide counseling as needed

for the purposes identified in paragraphs (a) and (b) of this section

upon the request of the eligible person.

(Authority: 38 U.S.C. 3520, 3561(a))

Sec. 21.3102 Required counseling.

(a) Child. The VA counseling psychologist will provide counseling

and assist in preparing the educational plan only if the eligible child

or his or her parent or guardian requests assistance, except that

counseling is required for an eligible child if--

(1) The eligible child may require specialized vocational training

or special restorative training; or

(2) The eligible child has reached the compulsory school attendance

age under State law, but has neither reached his or her 18th birthday,

nor completed secondary schooling. See Sec. 21.3040(a).

(b) Spouse or surviving spouse. Counseling is required for a spouse

or surviving spouse only if he or she desires specialized vocational

training.

(Authority: 38 U.S.C. 3520, 3536, 3541, 3561)

Sec. 21.3103 Failure to cooperate.

VA will not act further on an eligible person's application for

assistance under 38 U.S.C. chapter 35 when counseling is required for

him or her and the eligible person--

(a) Fails to report;

(b) Fails to cooperate in the counseling process; or

(c) Does not complete counseling to the extent required under

Sec. 21.3102.

(Authority: 38 U.S.C. 3536, 3541, 3561(a))

Sec. 21.3104 Special training.

(a) Initial counseling. A counseling psychologist in the Vocational

Rehabilitation and Counseling Division will counsel a disabled child,

spouse, or surviving spouse before referring the case to the Vocational

Rehabilitation Panel (established under Sec. 21.60) for consideration

as to the child's, spouse's or surviving spouse's need for a course of

specialized vocational training or the child's need for special

restorative training. After consulting with the panel, and considering

the panel's report, the counseling psychologist will determine if the

disabled child, spouse, or surviving spouse needs a course of

specialized vocational training or the disabled child needs special

restorative training, and where need is found to exist will prescribe a

course which is suitable to accomplish the goals of 38 U.S.C. chapter

35.

(Authority: 38 U.S.C. 3536, 3540-3543, 3561(a))

(b) Counseling after special restorative training. When an eligible

child completes or discontinues a course of special restorative

training without having selected an objective and a program of

education, a counseling psychologist in the Vocational Rehabilitation

and Counseling Division will provide additional counseling to assist

the child in selecting a program of education suitable to accomplish

the purposes of 38 U.S.C. chapter 35.

(Authority: 38 U.S.C. 3561)

Sec. 21.3105 Travel expenses.

(a) General. VA shall determine and pay the necessary expense of

travel to and from the place of counseling for an eligible person who

is required to receive counseling as provided under 38 U.S.C. 111 (a),

(d), (e), and (g).

(Authority: 38 U.S.C. 111 (a), (d), (e), and (g))

(b) Restriction. VA will not pay the necessary cost of travel to

and from the place of counseling when counseling is not required, but

is provided as a result of a voluntary request by the eligible person.

(Authority: 38 U.S.C. 111)

15. Sections 21.3130 and 21.3131 are added following the

undesignated center heading that precedes Sec. 21.3145, to read as

follows:

Sec. 21.3130 Educational assistance.

(a) Approval of a program of education. VA will approve a program

of education selected by an eligible person if:

(1) The program is described in Sec. 21.3021 (h) and (i) or (j);

(2) The individual is not already qualified for the objective of

the program of education;

(3) The proposed educational institution or training establishment

is in compliance with all the requirements of 38 U.S.C. chapters 35 and

36; and

(4) It does not appear that the enrollment in or pursuit of such

person's program of education would violate any provision of 38 U.S.C.

chapters 35 and 36.

(Authority: 38 U.S.C. 3521)

(b) Payments. VA will pay educational assistance at the rate

specified in Sec. 21.3131 (subject to the reductions required by

Sec. 21.3132) while the eligible person is pursuing an approved program

of education or training.

(Authority: 38 U.S.C. 3521, 3532)

[[Page 26110]]

(c) No payment for excessive training. (1) VA will make no payment

for:

(i) Training in an apprenticeship or other on-job training program

in excess of the number of hours approved by the State approving agency

or VA; or

(ii) Lessons completed in a correspondence course in excess of the

number approved by the State approving agency.

(2) A school's standards of progress may permit a student to repeat

a course or portion of a course in which he or she has done poorly. VA

considers the repeated courses to be part of the program of education.

VA will make no payment for courses or training if the courses or

training are not part of the eligible person's program of education.

(Authority: 38 U.S.C. 3501(a)(5), 3521)

(d) Courses precluded. VA may not pay educational assistance:

(1) For pursuit of a course if approval of the enrollment in the

course is precluded by Sec. 21.4252;

(2) For training in a foreign country unless the training is in the

Philippines or is approved pursuant to the provisions of Sec. 21.4260;

or

(3) For pursuit of a course offered by open-circuit television,

unless the eligible person's pursuit meets the requirements of

Sec. 21.4233(c).

(Authority: 38 U.S.C. 3523)

(e) Commencing date. In determining the commencing date of an award

of educational assistance, VA will apply the provisions of

Sec. 21.4131.

(Authority: 38 U.S.C. 5113)

Sec. 21.3131 Rates--educational assistance allowance--38 U.S.C.

chapter 35.

(a) Rates. Except as provided in Sec. 21.3132, educational

assistance allowance is payable at the following rates effective

January 1, 1990:

------------------------------------------------------------------------

Type of courses Monthly rate

------------------------------------------------------------------------

Institutional:

Full time............................... $404

\3/4\ time.............................. 304

\1/2\ time.............................. 202

Less than \1/2\ but more than \1/4\ time 202

\3\.

\1/4\ time or less \3\.................. 101

Cooperative (other than farm $327

cooperative) (Full time only).

Apprentice or On-Job (full time only,

but see footnote \1\)

First six months........................ $294

Second six months....................... 220

Third six months........................ 146

Fourth six months and thereafter........ 73

Farm Cooperative:

Full time............................... $327

\3/4\ time.............................. 245

\1/2\ time.............................. 163

Correspondence............................ 55 percent of the

established charge for the

number of lessons completed

by the eligible spouse or

surviving spouse and

serviced by the school--

Allowance paid

quarterly.\2\

------------------------------------------------------------------------

\1\ See footnote 5 of Sec. 21.4270(c) for measurement of full time and

Sec. 21.3132(c) for proportionate reduction in award for completion

of less than 120 hours per month.

\2\ Established charge means the charge for the course or courses

determined on the basis of the lowest extended time payment plan

offered by the institution and approved by the appropriate State

approving agency or the actual cost to the eligible spouse or

surviving spouse, whichever is the lesser. VA considers the continuity

of an enrollment broken when there are more than 6 months between the

servicing of the lessons.

\3\ If an eligible person under chapter 35 pursuing independent study on

a less than one-half-time basis completes his or her program before

the designated completion time, his or her award will be recomputed to

permit payment of tuition and fees not to exceed $202 or $101 as

appropriate, per month, if the maximum allowance is not initially

authorized.

(Authority: 38 U.S.C. 3532, 3686)

(b) Less than half time. The monthly rate for an eligible person

who is pursuing an institutional course on less than one-half time

basis may not exceed the monthly rate of the cost of the course

computed on basis of the total cost for tuition and fees which the

school requires similarly circumstanced individuals enrolled in the

same course to pay. ``Cost of the course'' does not include the cost of

books or supplies which the student is required to purchase at his or

her own expense.

(Authority: 38 U.S.C. 3532(a)(2))

(c) Courses leading to a secondary school diploma or equivalency

certificate. The monthly rate of Survivors' and Dependents' Educational

Assistance payable for an eligible person enrolled in a course leading

to a secondary school diploma or equivalency certificate shall be the

rate for institutional training stated in paragraph (a) of this

section.

(Authority: 38 U.S.C. 3532(d), 3533)

(d) Payments made to eligible persons in the Republic of the

Philippines or to certain Filipinos. When the eligible person is

pursuing training at an institution located in the Republic of the

Philippines or when an eligible child's entitlement is based on the

service of a veteran in the Philippine Commonwealth Army, or as a

Philippine Scout as defined in Sec. 3.8 (b), (c), or (d) of this

chapter, payments of educational assistance allowance made after

December 31, 1994, will be made at the rate of 50 cents for each dollar

authorized.

(Authority: 38 U.S.C. 3532(d), 3565)

Sec. 21.4137 [Redesignated as Sec. 21.3132]

Sec. 21.3132 [Amended]

16. Section 21.4137 is redesignated as Sec. 21.3132; paragraphs (d)

through (g) are removed; paragraph (h) is redesignated as paragraph

(d); newly redesignated paragraph (d)(4) is amended by removing ``106''

and adding, in its place, ``1606''; newly redesignated paragraphs

(d)(4) and (d)(5) are amended by removing ``(h)(1)(ii)'' in each place

it appears and adding, in its place, ``(d)(1)(ii)''; paragraphs (i)

through (o) are removed; and the section heading is revised,

introductory text is added, and paragraphs (a) through (c) are revised,

to read as follows:

Sec. 21.3132 Reductions in Survivors' and Dependents' Educational

Assistance.

The monthly rates established in Sec. 21.3131 shall be reduced as

stated in this section whenever the circumstances described in this

section arise.

(a) No educational assistance allowance for some incarcerated

eligible persons. VA will pay no educational assistance allowance to an

eligible person who:

(1) Is incarcerated in a Federal, State, or local penal institution

for conviction of a felony; and

(2) Is enrolled in a course:

(i) For which there are no tuition or fees, or charges for books,

supplies, and equipment; or

(ii) For which tuition and fees are being paid by a Federal program

(other than one administered by VA) or by a State or local program, and

the eligible person is incurring no charge for the books, supplies, and

equipment necessary for the course.

(Authority: 38 U.S.C. 3532(e))

(b) Reduced educational assistance allowance for some incarcerated

eligible persons--felony conviction. (1) VA will pay a reduced

educational assistance allowance to an eligible person who:

(i) Is incarcerated in a Federal, State, or local penal institution

for conviction of a felony; and

(ii) Is enrolled in a course:

(A) For which the eligible person pays some (but not all) of the

charges for tuition and fees; or

(B) For which a Federal program (other than one administered by VA)

or a State or local program pays all the

[[Page 26111]]

charges for tuition and fees, but which requires the eligible person to

pay for books, supplies, and equipment.

(2) The monthly rate of educational assistance allowance payable to

such an eligible person who is pursuing a course on a half-time or

greater basis shall be the lesser of the following:

(i) The monthly rate of the portion of the tuition and fees that

the eligible person must pay plus the monthly rate of the charge to the

eligible person for the cost of necessary supplies, books, and

equipment; or

(ii) The monthly rate stated in Sec. 21.3131.

(3) The monthly rate of educational assistance payable to such an

eligible person who is pursuing the course on a less than half-time

basis or on a one quarter-time basis shall be the lowest of the

following:

(i) The monthly rate of the tuition and fees charged for the

course;

(ii) The monthly rate of tuition and fees which the eligible person

must pay plus the monthly rate of the charge to the eligible person for

the cost of necessary supplies, books, and equipment; or

(iii) The monthly rate stated in Sec. 21.3131.

(Authority: 38 U.S.C. 3482(g))

(c) Reduction in training assistance allowance. (1) For any month

in which an eligible person pursuing an apprenticeship or on-job

training program fails to complete 120 hours of training, VA shall

reduce the rate specified in Sec. 21.3131(a) proportionally. In this

computation VA shall round the number of hours worked to the nearest

multiple of eight.

(2) For the purpose of this paragraph hours worked include only:

(i) The training hours the eligible person worked; and

(ii) All hours of the eligible person's related training which

occurred during the standard workweek and for which the eligible person

received wages.

(Authority: 38 U.S.C. 3687(b)(3))

* * * * *

17. Section 21.3133 is added to read as follows:

Sec. 21.3133 Payment procedures.

(a) Release of payments and payment procedures. In determining

whether payments of educational assistance allowance may be made in a

lump sum, in advance, for an interval or if a certification is required

from an eligible person before a payment may be made, VA will apply the

provisions of Sec. 21.4138.

(Authority: 38 U.S.C. 3680)

(b) Payee. (1) VA will pay an educational assistance allowance to

the eligible person if he or she has attained majority and has no known

legal disability.

(2) If an eligible person has not attained majority, VA will pay an

educational assistance allowance directly to an eligible person, a

relative, or some other person for the use and benefit of the eligible

person notwithstanding a legal disability on the part of the eligible

person when VA determines:

(i) The best interest of the eligible person would be served;

(ii) Undue delay in payment would be avoided; or

(iii) Payment would otherwise not be feasible.

(Authority: 38 U.S.C. 3501(a)(4), 3501(c), 3531(a), 5502)

(c) Payment of accrued benefits. Educational assistance remaining

due and unpaid at the date of the eligible person's death is payable

under the provisions of Sec. 3.1000 of this chapter.

(Authority: 38 U.S.C. 5121)

(d) Tutorial assistance. An individual who is otherwise eligible to

receive benefits under the Survivors' and Dependents' Educational

Assistance program may receive supplemental monetary assistance to

provide tutorial services. In determining whether VA will pay the

individual this assistance, VA will apply the provisions of

Sec. 21.4236.

(Authority: 38 U.S.C. 3492, 3533(b))

(e) Offsets: 38 U.S.C. chapter 35, compensation, pension and

dependency and indemnity compensation. Payment of dependents'

educational assistance will be subject to offset of amounts of pension,

compensation or dependency and indemnity compensation paid over the

same period on behalf of a child based on school attendance.

(Authority: 38 U.S.C. 3562)

(f) Final payment. VA may withhold final payment until VA receives

proof of continued enrollment and adjusts the eligible person's

account.

(Authority: 38 U.S.C. 3680)

18. Section 21.3135 is added to read as follows:

Sec. 21.3135 Reduction or discontinuance dates for awards of

educational assistance allowance.

The reduction or discontinuance date of an award of educational

assistance will be as stated in this section. If more than one basis

for reduction or discontinuance is involved, the earliest date will

control.

(a) Ending date of course. Educational assistance allowance will be

discontinued on the ending date of the course or period of enrollment

as certified by the school.

(Authority: 38 U.S.C. 3531, 3680(a))

(b) Ending date of eligibility. Educational assistance allowance

will be discontinued on the ending date of the eligible person's

eligibility as determined by Sec. 21.3041, Sec. 21.3042, Sec. 21.3043,

or Sec. 21.3046.

(Authority: 38 U.S.C. 3512)

(c) General reduction or discontinuance dates. Educational

assistance allowance will be reduced or discontinued on the date

specified in Sec. 21.4135.

(Authority: 38 U.S.C. 3482(g), 3531, 3671(g), 3672(a), 3680, 3683,

3690, 5112, 5113, 6103, 6104, 6105)

(d) Divorce. If the veteran and eligible spouse divorce, the

discontinuance date for the eligible spouse's award of educational

assistance will be:

(1) The end of the quarter or semester if the school is operated on

a quarter or semester system, and the divorce was without fault on the

eligible spouse's part;

(2) The end of the course or a 12-week period, whichever is

earlier, if the school does not operate on a quarter or semester

system, and the divorce was without fault on the eligible spouse's

part; or

(3) In all other instances, the date the divorce decree becomes

final.

(Authority: 38 U.S.C. 3501(a)(1)(D), 3511(b))

(e) Remarriage or other relationship of spouse or surviving spouse.

(1) If an eligible surviving spouse remarries, the date of

discontinuance of his or her award of educational assistance allowance

will be the last date of attendance before remarriage.

(2) If a spouse or surviving spouse begins a relationship by living

with another person and holding himself or herself out openly to the

public to be the spouse of the other person, the date of discontinuance

of his or her award of educational assistance allowance will be the

last date of the month before the spouse's or surviving spouse's

relationship began.

(Authority: 38 U.S.C. 101(3), 3501(a)(1)(B))

(f) Entrance on active duty (Sec. 21.3042). If an eligible person

enters on active duty, VA will terminate his or her educational

assistance allowance on the day before the day of entrance on active

duty. Brief periods of active duty for training, if the school permits

such an absence without interruption of

[[Page 26112]]

training, will not result in termination of the allowance under this

paragraph.

(Authority: 38 U.S.C. 3501(d))

(g) Eligible child ceases to be a stepchild. When an eligible child

loses eligibility because he or she ceases to be the stepchild of the

veteran, VA will discontinue the dependent's educational assistance

allowance on the last day of the child's eligibility as determined by

Sec. 21.3041(d)(9).

(Authority: 38 U.S.C. 101(4)(A), 3501)

(h) Veteran no longer rated permanently and totally disabled. (1)

If the veteran on whose service an eligible person's eligibility is

based is no longer permanently and totally disabled, VA will

discontinue the educational assistance allowance--

(i) On the last date of the quarter or semester during which VA

rated the veteran as no longer permanently and totally disabled if the

eligible person's educational institution is organized on a quarter or

semester basis; or

(ii) On the earlier of the following dates when the eligible

person's educational institution is not organized on a quarter or

semester basis:

(A) The last date of the course;

(B) The end of a 12-week period beginning on the date VA rated the

veteran as being no longer permanently and totally disabled.

(Authority: 38 U.S.C. 3511(b), 3512(a)(6)(A))

(i) Serviceperson is removed from ``missing status'' listing. (1)

If the serviceperson on whose service an eligible person's eligibility

is based is removed from the ``missing status'' listing, VA will

discontinue the educational assistance allowance--

(i) On the last date of the quarter or semester during which the

serviceperson was removed from the ``missing status'' listing if the

eligible person's educational institution is organized on a quarter or

semester basis; or

(ii) On the earlier of the following dates when the eligible

person's educational institution is not organized on a quarter or

semester basis:

(A) The last date of the course;

(B) The end of a 12-week period beginning on the date the

serviceperson was removed from the ``missing status'' listing.

(Authority: 38 U.S.C. 3512(a)(6)(A))

Sec. 21.3145 [Removed]

19. Section 21.3145 is removed.

20. In Sec. 21.3330, paragraph (a) is amended by removing

``Sec. 21.4139'' and adding, in its place, ``Sec. 21.3133(b)''; and

paragraph (c) is revised to read as follows:

Sec. 21.3330 Payments.

* * * * *

(c) The provisions of Sec. 21.3133(e) apply to the payment of

special restorative training allowance.

(Authority: 38 U.S.C. 3562)

Sec. 21.3331 [Amended]

21. Section 21.3331 is amended by removing ``Sec. 21.4131'', and

adding, in its place, ``Sec. 21.3130(c)''.

Sec. 21.3332 [Amended]

22. Section 21.3332 is amended by removing ``Sec. 21.4135'', and

adding, in its place, ``Sec. 21.3130(d)''.

23. An undesignated center heading and Sec. 21.3344 are added to

read as follows:

Special Assistance and Training

Sec. 21.3344 Special assistance for the educationally disadvantaged.

(a) Enrollment. VA may approve the enrollment of an eligible person

in an appropriate course or courses at the secondary school level. This

approval may be made only if the eligible person--

(1) Has not received a secondary school diploma (or an equivalency

certificate);

(2) Needs additional secondary school education, remedial,

refresher, or deficiency courses, to qualify for admission to an

appropriate educational institution in a State in order to pursue a

program of education; and

(3) Is to pursue the course or courses in a State.

(Authority: 38 U.S.C. 3491(a), 3533)

(b) Measurement. VA will measure remedial, deficiency, or refresher

courses offered at the secondary school level as provided in

Secs. 21.4270(a)(2) and 21.4272(k).

(Authority: 38 U.S.C. 3533)

(c) Educational assistance. VA will authorize educational

assistance at the monthly rates specified in Sec. 21.3131.

(Authority: 38 U.S.C. 3491(a), 3533)

(d) Entitlement charge. The provisions of Sec. 21.3045 will

determine whether VA will make a charge against the period of the

entitlement of the eligible person because of enrollment in a course

under the provisions of this section.

(Authority: 38 U.S.C. 3533)

(e) Certifications. (1) Certifications of the eligible person's

need for deficiency or remedial courses in basic English language

skills and mathematics skills may be made by:

(i) A VA counseling psychologist in the Vocational Rehabilitation

and Counseling Division;

(ii) The educational institution administering the course; or

(iii) The educational institution where the student has applied for

admission.

(2) Certification of need for other refresher, remedial or

deficiency course requirements are to be made by the educational

institution--

(i) Administering the course which the eligible person is planning

to enter; or

(ii) Where the eligible person has applied for admission.

(Authority: 38 U.S.C. 3533)

(f) Basic skills. Basic English language courses or mathematics

courses will be authorized when it is found by accepted testing methods

that the eligible person is lacking in basic reading, writing,

speaking, or essential mathematics.

(Authority: 38 U.S.C. 3533)

Subpart D--Administration of Educational Assistance Programs

24. The authority citation for subpart D is revised to read as

follows:

Authority: 10 U.S.C. ch. 1606; 38 U.S.C. 501(a), chs. 30, 32,

34, 35, 36, unless otherwise noted.

25. The heading for subpart D is revised to read as set forth

above.

Sec. 21.4001 [Amended]

26. In Sec. 21.4001, paragraph (a) is amended by removing ``Chief

Benefits Director'' and adding, in its place, ``Under Secretary for

Benefits''; by removing ``Vocational Rehabilitation and''; and by

removing ``34, 35,'' and adding, in its place, ``34''; paragraph (b) is

amended by removing ``Chief, Benefits Director'' and adding, in its

place, ``Under Secretary for Benefits''; and by removing ``Vocational

Rehabilitation and''; paragraph (c) introductory text is amended by

removing ``Vocational Rehabilitation and''; paragraph (d) is amended by

removing ``Chief Benefits Director'' and adding, in its place, ``Under

Secretary for Benefits'', and by adding ``his or her'' immediately

preceding ``designee''; paragraph (e) is amended by removing ``Chief

Benefits Director'' and adding, in its place, ``Under Secretary for

Benefits''; paragraph (f) is amended by removing ``Chief Benefits

Director'' and adding, in its place, ``Under Secretary for Benefits'';

and paragraph (g) is amended by removing ``Education'' and adding, in

its place, ``Counseling''.

Sec. 21.4009 [Amended]

27. In Sec. 21.4009, paragraph (a)(2)(i) is amended by removing

``excessive absences from a course or''; and by removing ``veteran''

and adding, in its place, ``veteran, reservist''.

[[Page 26113]]

Sec. 21.4022 [Amended]

28. In Sec. 21.4022, the heading for paragraph (a) is removed;

paragraph (b) is removed; and paragraph (a) introductory text and

paragraphs (a)(1), (a)(2), (a)(3), (a)(4), (a)(5), (a)(6), (a)(7),

(a)(8), and (a)(9) are redesignated as introductory text and paragraphs

(a), (b), (c), (d), (e), (f), (g), (h), and (i), respectively.

Sec. 21.4025 [Removed]

29. Section 21.4025 is removed.

Secs. 21.4100 through 21.4105 and 21.4130 [Removed]

30. The undesignated center heading which precedes Sec. 21.4100,

and Secs. 21.4100 through 21.4105 and Sec. 21.4130 are removed.

Sec. 21.4131 [Amended]

31. In Sec. 21.4131, paragraphs (e) and (j) are removed and

reserved; the heading for paragraph (g) is amended by removing

``(Secs. 21.1042(b), 21.3042(b))''; paragraph (g) is amended by

removing ``veteran'' and adding, in its place, ``veteran or eligible

person''; the authority citation for paragraph (g) is amended by

removing ``3462(b)'' and adding, in its place, ``3462(b), 3501(d)'';

and paragraph (h), introductory text, is amended by removing

``Sec. 21.4136 (n), (o), (p), or (r) Sec. 21.4137 (j) or (l)'' and

adding, in its place, ``Sec. 21.3132(a) or (b) or Sec. 21.5139''.

Sec. 21.4132 [Removed]

32. Section 21.4132 is removed.

33. In Sec. 21.4135, paragraphs (b), (c), (d), (n), (o), (v), and

(z) are removed and reserved; paragraph (e)(2) introductory text is

amended by removing ``as provided in Sec. 21.4136(k) or 21.4137(h),'';

paragraph (m)(1) is amended by removing ``Sec. 21.4136(n), (o), (p), or

(r) or Sec. 21.4137(j) or (l)'' and adding, in its place,

``Sec. 21.3132(a) or (b) or Sec. 21.5139''; and in paragraph (e), the

heading and paragraph (e)(1) are revised, to read as follows:

Sec. 21.4135 Discontinuance dates.

* * * * *

(e) Course discontinued; course interrupted; course terminated;

course not satisfactorily completed or withdrawn from. (1) If the

individual receives all nonpunitive grades, or withdraws from all

courses other than because of being ordered to active duty, and no

mitigating circumstances are found, VA will terminate the individual's

educational assistance allowance effective the first date of the term

in which the withdrawal occurs.

* * * * *

34. In Sec. 21.4136, paragraphs (a) through (j) are removed;

paragraph (k) heading, paragraph (k)(1) introductory text, paragraphs

(k)(1)(i), (k)(1)(ii) introductory text, (k)(1)(ii)(A), (k)(1)(ii)(B),

(k)(1)(ii)(C), and (k)(2) through (k)(5) are redesignated as paragraph

(a) heading, paragraph (a) introductory text, paragraphs (a)(1), (a)(2)

introductory text, (a)(2)(i), (a)(2)(ii), (a)(2)(iii), and (b) through

(e), respectively; newly redesignated paragraphs (a)(2)(ii) and

(a)(2)(iii) are amended by removing ``veteran'' wherever it appears and

adding, in its place, ``individual''; paragraphs (l) through (t) and

the cross reference at the end of the section are removed; and the

section heading, the heading and introductory text of newly

redesignated paragraph (a), the authority citation at the end of newly

redesignated paragraph (a), and newly redesignated paragraph (a)(1) and

paragraphs (b) through (e) are revised to read as follows:

Sec. 21.4136 Withdrawals or nonpunitive grades may result in

nonpayment.

(a) General. VA will not pay benefits to an individual for a course

from which the individual withdraws or receives a nonpunitive grade

which is not used in computing the requirements for graduation unless:

(1) The individual withdraws because he or she is ordered to active

duty; or

* * * * *

(Authority: 38 U.S.C. 3680(a))

(b) Representative mitigating circumstances. The following

circumstances, which are not all inclusive, are representative of those

that VA considers to be mitigating provided they prevent the individual

from pursuing the program of education continuously:

(1) An illness of the individual;

(2) An illness or death in the individual's family;

(3) An unavoidable geographical transfer resulting from the

individual's employment;

(4) An unavoidable change in the individual's conditions of

employment;

(5) Immediate family or financial obligations beyond the control of

the individual that require him or her to suspend pursuit of the

program of education to obtain employment;

(6) Discontinuance of the course by the school;

(7) Unanticipated active duty for training;

(8) Unanticipated difficulties in caring for the individual's child

or children.

(Authority: 38 U.S.C. 3680(a))

(c) Failure to complete a course for the educationally

disadvantaged. If the individual fails to satisfactorily complete a

course under 38 U.S.C. 3491(a) without fault, VA will consider the

circumstances that caused the failure to be mitigating. This will be

the case even if the circumstances were not so severe as to preclude

continuous pursuit of a program of education.

(d) Withdrawals after May 31, 1989. In the first instance of a

withdrawal after May 31, 1989, from a course or courses for which the

individual received educational assistance under 38 U.S.C. chapter 32,

VA will consider that mitigating circumstances exist with respect to

courses totaling not more than six semester hours or the equivalent,

and paragraphs (a)(2)(ii) and (a)(2)(iii) of this section will not

apply.

(Authority: 38 U.S.C. 3680(a)(3))

(e) Withdrawals during a drop-add period. If the individual

withdraws from a course during a drop-add period, VA will consider the

circumstances that caused the withdrawal to be mitigating, and

paragraphs (a)(2)(ii) and (a)(2)(iii) of this section will not apply.

(Authority: 38 U.S.C. 3680(a))

Secs. 21.4139 through 21.4141 [Removed]

35. Sections 21.4139 through 21.4141 are removed.

36. In Sec. 21.4145, paragraph (b) is amended by removing

``veteran'' wherever it appears, and adding, in its place, ``veteran,

reservist, or eligible person'', and by removing ``veteran's'' and

adding, in its place, ``veteran's, reservist's, or eligible person's'';

paragraph (c) introductory text is amended by removing ``Veteran-

student'' and adding, in its place, ``Work-study''; the heading of

paragraph (g) is amended by removing ``Veteran'' and adding, in its

place, ``Veteran, reservist, or eligible person''; paragraphs (g) and

(h) are amended by removing ``veteran'' wherever it appears, and

adding, in its place, ``veteran, reservist, or eligible person'';

paragraph (i) is amended by removing ``veterans'' and adding, in its

place, ``veterans, reservists, or eligible persons''; and the section

heading and paragraphs (a), (c)(3), (c)(4), (d), (e), and (f) are

revised, and paragraph (c)(5) is added, to read as follows:

Sec. 21.4145 Work-study allowance.

(a) Eligibility. (1) A veteran or reservist pursuing a program of

education under either 38 U.S.C. chapter 30 or 32 or 10 U.S.C. chapter

1606 at a rate of three-quarter time or full time is eligible to

receive a work-study allowance.

(2) An eligible person is eligible to receive a work-study

allowance when-

[[Page 26114]]

(i) The eligible person is pursuing a program of education under 38

U.S.C. chapter 35 on at least a three-quarter-time basis;

(ii) The eligible person is pursuing a program of education in a

State; and

(iii) The eligible person is not pursuing a program of special

restorative training.

(Authority: 10 U.S.C. 16136; 38 U.S.C. 3034, 3241, 3485, 3537)

* * * * *

(c) * * *

(3) Hospital and domiciliary care and medical treatment at VA

facilities;

(4) For a reservist training under 10 U.S.C. chapter 1606,

activities relating to the administration of 10 U.S.C. chapter 1606 at

Department of Defense facilities, Coast Guard facilities, or National

Guard facilities; and

(5) Any other appropriate activity of VA.

(Authority: 10 U.S.C. 16136; 38 U.S.C. 3034, 3241, 3485, 3537)

(d) Rate of payment. In return for the veteran's, reservist's, or

eligible person's agreement to perform services for VA totaling not

more than 25 hours times the number of weeks contained in an enrollment

period, VA will pay an allowance in an amount equal to the higher of:

(1) The hourly minimum wage in effect under section 6(a) of the

Fair Labor Standards Act of 1938 (29 U.S.C. 206(a)) times the number of

hours the veteran, reservist, or eligible person has agreed to work; or

(2) The hourly minimum wage under comparable law of the State in

which the services are to be performed times the number of hours the

veteran, reservist, or eligible person has agreed to work.

(Authority: 10 U.S.C. 16136; 38 U.S.C. 3034, 3241, 3485, 3537)

(e) Payment in advance. VA will pay in advance an amount equal to

the lesser of the following:

(1) 40 percent of the total amount payable under the contract; or

(2) An amount equal to 50 times the applicable minimum hourly wage

in effect on the date the contract is signed.

(Authority: 10 U.S.C. 16136; 38 U.S.C. 3034, 3241, 3485, 3537)

(f) Veteran, reservist, or eligible person reduces rate of

training. In the event the veteran, reservist, or eligible person

reduces his or her training to less than three-quarter-time before

completing an agreement, the veteran, reservist, or eligible person,

with the approval of the Director of the VA field station, or designee,

may be permitted to complete the portions of an agreement in the same

or immediately following term, quarter, or semester in which the

veteran, reservist, or eligible person ceases to be a three-quarter-

time student.

(Authority: 10 U.S.C. 16136; 38 U.S.C. 3034, 3241, 3485, 3537)

* * * * *

Sec. 21.4146 [Amended]

37. In Sec. 21.4146, paragraph (a) is amended by removing

``Chapters 34, 35 and 36, Title 38, U.S.C.'' and adding, in its place,

``38 U.S.C. chapters 30, 32, 35, or 36, or 10 U.S.C. chapter 1606'';

and paragraph (f) is removed.

38. In Sec. 21.4153, paragraph (b) is amended by removing ``Chief

Benefits Director'' and adding, in its place, ``Under Secretary for

Benefits''; and by removing ``Vocational Rehabilitation and'';

paragraph (c)(2)(i)(B) is amended by removing ``Vocational

Rehabilitation and''; and paragraph (c)(3) is revised, to read as

follows:

Sec. 21.4153 Reimbursement of expenses.

* * * * *

(c) Reimbursable expenses. * * *

(3) Administrative expenses. In determining the allowance for

administrative expenses for which payment may be authorized, VA will

apply the provisions of 38 U.S.C. 3674(b). In making that application,

VA will determine reimbursable salary cost pursuant to paragraph (c)(1)

of this section.

* * * * *

39. In Sec. 21.4200, paragraph (v) is revised to read as follows:

Sec. 21.4200 Definitions.

* * * * *

(v) Reservist. The term reservist means a member of the Selected

Reserve of the Ready Reserve of any of the reserve components

(including the Army National Guard of the United States and the Air

National Guard of the United States) of the Armed Forces who is

eligible to receive educational assistance under 38 U.S.C. chapter 30

or 10 U.S.C. chapter 1606.

(Authority: 38 U.S.C. 3002)

Sec. 21.4201 [Amended]

40. In Sec. 21.4201, paragraph (g)(6) is amended by removing ``in a

course either before December 1, 1976 or after November 30, 1976,''.

Sec. 21.4204 [Amended]

41. In Sec. 21.4204, paragraph (b)(2) is removed; and paragraphs

(b)(3), (b)(4), (b)(5), and (b)(6) are redesignated as paragraphs

(b)(2), (b)(3), (b)(4), and (b)(5), respectively.

Sec. 21.4205 [Removed]

42. Section 21.4205 is removed.

Sec. 21.4209 [Amended]

43. Section 21.4209 is amended in the heading of paragraph (c) by

removing ``Below college level'' and adding, in its place, ``Noncollege

degree''; in paragraph (c) by removing ``veterans or'' and adding, in

its place, ``veterans, servicemembers, reservists, and/or''; by

removing ``or courses which do'' and adding, in its place, ``that

does''; and by removing ``which has enrolled veterans under Chapter 34

or eligible persons under Chapter 35'' and adding, in its place, ``that

has enrolled veterans under 38 U.S.C. chapter 30 or 32, reservists

under 10 U.S.C. chapter 1606, or eligible persons under 38 U.S.C.

chapter 35''; and, immediately after paragraph (c), by adding an

authority citation to read

``(Authority: 10 U.S.C. 16136; 38 U.S.C. 3034, 3241, 3690(c))''.

Sec. 21.4230 [Removed]

44. Section 21.4230 is removed.

Sec. 21.4235 [Removed]

45. Section 21.4235 is removed.

46. In Sec. 21.4236, the section heading, the authority citation

following paragraph (b), and paragraphs (c) and (d) are revised, to

read as follows:

Sec. 21.4236 Tutorial assistance.

* * * * *

(b) * * *

(Authority: 10 U.S.C. 16131(h); 38 U.S.C. 3019, 3234, 3492, 3533(b))

(c) Limits on tutorial assistance. (1) VA will authorize the cost

of tutorial assistance in an amount not to exceed $100 per month.

(2) The total amount of all tutorial assistance provided under this

section will not exceed $1200.

(Authority: 38 U.S.C. 3019, 3492, 3533(b))

(d) Entitlement charge. VA will make no charge against the

veteran's or eligible person's entitlement to educational assistance

for any amount of tutorial assistance authorized.

(Authority: 38 U.S.C. 3019, 3492, 3533(b))

Sec. 21.4237 [Removed]

47. Section 21.4237 is removed.

Sec. 21.4252 [Amended]

48. In Sec. 21.4252, the authority citation for paragraph (b)(3) is

amended by removing ``3473(a), 3523(a)'' and adding, in its place,

``3523(a), 3680A(b)''; paragraph (c)(1) is amended by removing

``training under Chapter 34.'' and adding, in its place, ``training;

or''; paragraph (c)(2) is removed; paragraph (c)(3) is redesignated as

[[Page 26115]]

paragraph (c)(2); and the authority citation for paragraph (c) is

amended by removing ``Sec. 2003, Pub. L. 97-35'' and adding, in its

place, ``10 U.S.C. 16131(g); 38 U.S.C. 3034(d), 3241(b), 3523(b),

3680A(b)''.

Sec. 21.4260 [Amended]

49. In Sec. 21.4260, paragraph (c)(1)(i) is amended by removing

``Secs. 21.1040 through 21.1045,'' and paragraph (c)(1)(ii) is amended

by removing ``21.4230 or Sec. 21.5230'' and adding, in its place,

``21.3021(h) or Sec. 21.5021(q)''.

Sec. 21.4264 [Amended]

50. In Sec. 21.4264, paragraph (b) is amended by removing ``a

veteran or'' and adding, in its place, ``an''; and paragraph (d)(1)

introductory text is amended by removing ``veterans,''.

Sec. 21.4266 [Amended]

51. In Sec. 21.4266, paragraph (c)(1)(iii) is amended by removing

``21.4203, 21.4204 and 21.4205''; and adding, in its place, ``21.4203

and 21.4204''.

Sec. 21.4276 [Removed]

52. Section 21.4276 is removed.

Subpart E--[Removed]

53. Subpart E is removed.

Subpart F--Education Loans

54. The authority citation for subpart F is revised to read as

follows:

Authority: 38 U.S.C. 501, 3537, 3698, 3699, unless otherwise

noted.

55. In Sec. 21.4500, paragraph (b) is amended by removing ``Veteran

or person'' and adding, in its place, ``spouse or surviving spouse'',

and by removing ``section 3698, Title 38, U.S.C.'' and adding, in its

place, ``38 U.S.C. 3512(f) and 3698.''; paragraph (d)(2) introductory

text is amended by removing ``a veteran or eligible person'' and

adding, in its place, ``an eligible spouse or surviving spouse''; the

authority citation following paragraph (d)(2) introductory text is

amended by removing ``3698'' and adding, in its place, ``3512(f),

3698''; paragraph (d)(2)(ii) is amended by removing ``Vocational

Rehabilitation and'' in each place it appears; the authority citation

for paragraph (d) is amended by removing ``3698(c)'' and adding, in its

place, ``3512(f), 3698(c)''; paragraph (e)(1) is amended by removing

``the veteran or other eligible person'' and adding, in its place,

``the eligible spouse or surviving spouse''; paragraph (e)(2) is

amended by removing ``the veteran or other eligible person'' and

adding, in its place, ``the eligible spouse or surviving spouse'';

paragraph (e)(3) is amended by removing ``the veteran or other eligible

person'' and adding, in its place, ``the eligible spouse or surviving

spouse''; paragraph (e)(4) is amended by removing ``the veteran or

other eligible person under section 3231, 3461, or subchapter II of

Chapter 35, Title 38 U.S.C., which applies solely to the veteran or

eligible person'' and adding, in its place, ``the eligible spouse or

surviving spouse under 38 U.S.C. chapter 35''; paragraph (e)(5) is

amended by removing ``veteran or other eligible person'' and adding, in

its place, ``eligible spouse or surviving spouse''; paragraph (e)(6) is

amended by removing ``veteran under section 3485, Title 38 U.S.C.'' and

adding, in its place, ``eligible spouse or surviving spouse under 38

U.S.C. 3537''; paragraph (g) is amended by removing ``a veteran or

eligible person'' and adding, in its place, ``an eligible spouse or

surviving spouse''; and by removing ``Effective January 1, 1975, the''

and adding, in its place, ``The''; the authority citation following

paragraph (h) is amended by removing ``3698(b)'' and adding, in its

place, ``3512(f), 3698(b)''; and paragraph (f) is revised to read as

follows:

Sec. 21.4500 Definitions.

* * * * *

(f) Actual cost of attendance. The term actual cost of attendance

means:

(1) The actual charge per student for tuition, fees, and books;

(2) An allowance for commuting (this allowance will be based on

22.5 cents per mile for distances not exceeding normal commuting

distance);

(3) An allowance for other expenses reasonably related to

attendance at the institution at which the eligible spouse or surviving

spouse is enrolled; and

(4) A room and board allowance that shall be determined as follows:

(i) If the educational institution actually provides the eligible

spouse or surviving spouse with room and board, the allowance shall

equal the actual charges to him or her for room and board;

(ii) If the educational institution provides some students with

room and board, but does not provide room and board for the eligible

spouse or surviving spouse, the room and board allowance shall equal

either the actual expenses incurred by the eligible spouse or surviving

spouse for room and board, or the amount for room and board that the

educational institution would have charged the eligible spouse or

surviving spouse, had the educational institution provided him or her

with room and board, whichever is less; and

(iii) If the educational institution does not provide any students

with room and board, the room and board allowance shall equal either

the actual expenses incurred by the eligible spouse or surviving spouse

for room and board or the amount the eligible spouse or surviving

spouse would have been charged for room and board had he or she been

provided room and board by the nearest State college or State

university that provides room and board, whichever is less.

* * * * *

56. Section 21.4501 is revised to read as follows:

Sec. 21.4501 Eligibility.

(a) General. Any eligible spouse or surviving spouse shall be

eligible to receive an education loan if he or she meets the criteria

of this section.

(Authority: 38 U.S.C. 3512(f), 3698)

(b) Eligibility criteria. To qualify for an education loan--

(1) The eligible spouse's or surviving spouse's delimiting period

as determined by Sec. 21.3046 (a), (b), or (d) must have expired;

(2) The eligible spouse or surviving spouse must--

(i) Have financial resources that may reasonably be expected to be

expended for education needs and which are insufficient to meet the

actual costs of attendance;

(ii) Execute a promissory note payable to the Department of

Veterans Affairs, as provided by Sec. 21.4504;

(iii) Have unused entitlement provided under 38 U.S.C. 3511;

(iv) During the term, quarter, or semester for which the loan is

granted, be enrolled on a full-time basis in pursuit of the approved

program of education in which he or she was enrolled on the date his or

her eligibility expired under Sec. 21.3046 (a), (b), or (d); and

(v) Have been enrolled in a program of education on a full-time

basis--

(A) On the date his or her period of eligibility expired under

Sec. 21.3046 (a), (b), or (d); or

(B) On the last date of the ordinary term, semester or quarter

preceding the date his or her eligibility expired under Sec. 21.3046

(a), (b), or (d), if the delimiting date fell during a school break or

summer term.

(Authority: 38 U.S.C. 3512(f), 3698)

(c) Limitations. The period for which a loan may be granted shall

not extend beyond the earliest of the following dates:

(1) Two years after the expiration of the period of eligibility as

determined by Sec. 21.3046(a), (b), or (d);

(2) The date on which the eligible spouse's or surviving spouse's

entitlement is exhausted; or

[[Page 26116]]

(3) The date on which the eligible spouse or surviving spouse

completes the approved program of education which he or she was

pursuing on the date the delimiting period determined by Sec. 21.3046

(a), (b), or (d) expired.

(Authority: 38 U.S.C. 3512(f), 3698)

(d) Exclusions. No eligible spouse or surviving spouse shall be

authorized an education loan if he or she has defaulted on a previous

education loan and there is a remaining unliquidated payment due VA.

(Authority: 38 U.S.C. 3512(f), 3698)

Sec. 21.4502 [Amended]

57. In Sec. 21.4502, paragraph (a) is amended by removing ``veteran

or other eligible person'' and adding, in its place, ``spouse or

surviving spouse''; paragraph (b)(2) is amended by removing ``veteran

or other eligible person'' and adding, in its place, ``eligible spouse

or surviving spouse''; paragraph (b)(3) is amended by removing

``veteran or other eligible person'' and adding, in its place,

``eligible spouse or surviving spouse''; and paragraph (b)(4) is

amended by removing ``veteran or other eligible person'' wherever it

appears, and adding, in its place, ``eligible spouse or surviving

spouse''.

58. In Sec. 21.4503, paragraph (a)(1) is amended by removing

``veteran or other eligible person'' and adding, in its place,

``eligible spouse or surviving spouse''; paragraphs (b)(4), (b)(5),

(b)(10), and (b)(11) are removed; paragraphs (b)(6), (b)(7), (b)(8),

and (b)(9) are redesignated as paragraphs (b)(4), (b)(5), (b)(6), and

(b)(7), respectively; the authority citation following newly

redesignated paragraph (b)(4) is amended by removing ``3698(b)'' and

adding, in its place, ``3512(f), 3698(b)''; newly redesignated

paragraph (b)(5) is amended by removing ``veteran or other eligible

person'' and adding, in its place, ``eligible spouse or surviving

spouse''; newly redesignated paragraph (b)(7) is amended by removing

``veteran or other eligible person'' and adding, in its place, ``spouse

or surviving spouse''; and paragraph (b)(2) and newly redesignated

paragraph (b)(6) are revised to read as follows:

Sec. 21.4503 Determination of loan amount.

* * * * *

(b) Amount. * * *

(2) The aggregate of the amounts any eligible spouse or surviving

spouse may borrow for an education loan may not exceed $2,500 in any

one academic year. It also may not exceed an amount determined by

multiplying the number of months of educational assistance to which the

eligible spouse or surviving spouse would be entitled were it not for

the expiration of his or her delimiting period under 38 U.S.C. 3511

times $376.

(Authority: 38 U.S.C. 3512(f), 3698)

* * * * *

(6) An eligible spouse or surviving spouse may receive more than

one loan covering separate loan periods, subject to paragraphs (b)(3)

and (b)(7) of this section.

* * * * *

59. In Sec. 21.4504, paragraph (d) is amended by removing ``veteran

or other eligible person'' each place it appears, and adding, in its

place, ``spouse or surviving spouse'' and by removing ``veteran's or

eligible person's'' and adding, in its place, ``eligible spouse's or

surviving spouse's''; paragraph (e) is amended by removing ``veteran or

eligible person'' and adding, in its place, ``spouse or surviving

spouse''; paragraph (f) is amended by removing ``veteran or eligible

person'' each place it appears, and adding, in its place, ``spouse or

surviving spouse''; paragraph (g) is amended by removing ``A veteran or

eligible person'' and adding, in its place, ``An eligible spouse or

surviving spouse''; and paragraph (a) introductory text and paragraph

(a)(3)(ii) are revised to read as follows:

Sec. 21.4504 Promissory note.

(a) General. The agreement by VA to loan money pursuant to 38

U.S.C. 3512(f) and 3698 to any eligible spouse or surviving spouse

shall be in the form of a promissory note which shall include:

* * * * *

(3) * * *

(ii) For loans of less than $600, 1 year and 7 months after such

date for the first $50 of the loan plus 1 additional month for each

additional $5 of the loan.

* * * * *

Sec. 21.4505 [Amended]

60. In Sec. 21.4505, paragraph (a) is amended by removing ``veteran

or eligible person'' each place it appears, and adding, in its place,

``eligible spouse or surviving spouse''; paragraph (b)(1) is amended by

removing ``veteran or eligible person'' and adding, in its place,

``eligible spouse or surviving spouse''; paragraph (b)(2) introductory

text is amended by removing ``veterans and other eligible persons'',and

adding, in its place, ``spouses or surviving spouses''; and the

authority citation following paragraph (b) is amended by removing

``3698'' and adding, in its place, ``3512(f), 3698''.

Sec. 21.4507 [Amended]

61. In Sec. 21.4507, paragraph (a) is amended by removing

``persons'' and adding, in its place, ``spouses and surviving

spouses''; paragraph (b) is amended by removing ``veterans and other

eligible persons'' and adding, in its place, ``spouses and surviving

spouses''; and the authority citation is amended by removing ``3696''

and adding, in its place, ``3512(f), 3696''.

Subpart F-2--[Removed]

62. Subpart F-2 is removed.

Subpart K--All Volunteer Force Educational Assistance Program

(Montgomery GI Bill--Active Duty)

63. The authority citation for subpart K continues to read as

follows:

Authority: 38 U.S.C. 501(a), chs. 30, 36, unless otherwise

noted.

64. The heading for subpart K is revised to read as set forth

above.

65. In Sec. 21.7000, paragraph (b) is revised to read as follows:

Sec. 21.7000 Establishment of educational assistance program.

* * * * *

(b) Purpose. The purpose of this program is as stated in 38 U.S.C.

3001.

(Authority: 38 U.S.C. 3001)

66. In Sec. 21.7044, the section heading and paragraphs (a)(1) and

(b)(1) are revised to read as follows:

Sec. 21.7044 Persons with eligibility under 38 U.S.C. chapter 34.

* * * * *

(a) Eligibility based solely on active duty. * * *

(1) The individual must have met the requirements of 38 U.S.C.

chapter 34, as in effect on December 31, 1989, establishing eligibility

for educational assistance allowance under that chapter;

* * * * *

(b) Eligibility based on combined active duty service and service

in the Selected Reserve. * * *

(1) The individual must have met the requirements of 38 U.S.C.

chapter 34, as in effect on December 31, 1989, establishing eligibility

for educational assistance allowance under that chapter;

* * * * *

Sec. 21.7135 [Amended]

67. In Sec. 21.7135, paragraph (f)(3) is amended by removing

``21.7140(b) of this part'' and adding, in its place, ``21.7140(d)'';

paragraph (i) is amended by removing ``of this part'' wherever it

appears; paragraphs (j)(1), (k)(1), (n), and (o) are amended by

removing ``of this part''; paragraph (p) is amended by

[[Page 26117]]

removing ``of this part'' each place it appears; paragraph (r) is

amended by removing ``of this part'' each place it appears; and

paragraph (t) is amended by removing ``of this part''.

Sec. 21.7140 [Amended]

68. In Sec. 21.7140, paragraph (c)(1)(i) is amended by removing

``of this part''; paragraph (c)(2) introductory text is amended by

removing ``after-'' and adding, in its place, ``after--''; paragraph

(c)(2)(i) is amended by removing ``of this part''; paragraph (c)(2)(ii)

is amended by removing ``worked'' and adding, in its place,

``worked.''; paragraph (d)(1) is amended by removing ``of this part''

wherever it appears; paragraphs (d)(2)(i) and (d)(2)(ii) are amended by

removing ``Vocational Rehabilitation and'' wherever it appears; and

paragraph (e)(2) is amended by removing ``of this part''.

69. Section 21.7141 is revised to read as follows:

Sec. 21.7141 Tutorial assistance.

An individual who is otherwise eligible to receive benefits under

the Montgomery GI Bill - Active Duty may receive supplemental monetary

assistance to provide tutorial services. In determining whether VA will

pay the individual this assistance, VA will apply the provisions of

Sec. 21.4236.

(Authority: 38 U.S.C. 3019, 3492)

Sec. 21.7145 [Removed]

70. Section 21.7145 is removed.

Sec. 21.7154 [Amended]

71. In Sec. 21.7154, paragraph (b) is removed, and paragraph (c) is

redesignated as paragraph (b).

Sec. 21.7158 [Amended]

72. In Sec. 21.7158, paragraph (b)(1) is amended by removing

``21.744(b)'' and adding, in its place, ``21.7144(b)''.

[FR Doc. 96-12548 Filed 5-23-96; 8:45 am]

BILLING CODE 8320-01-P